Subscription box businesses have been gaining momentum and popularity and aren’t going away anytime soon. They offer consumers a convenient, personalized, and lower cost way to buy what they need and want. Custom box subscriptions are inherently personal and have the element of surprise built in which brings playfulness back to shopping.
Big entrant businesses and start-up subscription box businesses, fueled by venture capital investments, are using this model hoping to accelerate the building of a profitable business. And it’s no wonder since this market has grown by 100% YoY for the past 5 years. It’s also generating the highest players more than $2.6 billion in 2016.
PayWhirl can help manage and grow your custom box subscription business no matter what you’re selling.
47% of Subscription Box Companies Were Started Within The Last Year
Individual Experience
Subscription box consumers tend to be young hipster millennial men and women, who like to try new things, are interested in the arts, love shopping online, value product suggestions and reviews. (According to a recent study by McKinsey & Company) They all want a great experience from start to finish. Today’s shoppers are willing to subscribe where recurring purchases gives them tangible benefits like lower costs personalization and fewer trips to the store.
Personalization
Personalization is key. Customers are human, driven by their needs and desires. The products they love most are those that have a real emotional benefit they come to depend on. This is why you need to get customers excited by offering them something they are not expecting; which is why custom box subscriptions are an ideal instrument for a surprise. They aren’t just choosing products out of convenience they’re receiving items they personally select and are excited about getting.
Options
Subscribers want options with everything from product choices, frequency of deliveries, to payment methods. Custom box subscriptions offer customers a new level of flexibility by adapting. Successful companies have to innovate regularly by refining current products and developing new ones. They have to make sure these items are not only useful and relevant but things people wouldn’t necessarily find on their own.
Offering a stellar individual experience for everyone who signs up can be difficult. Customers will often cancel services that don’t deliver a superior end to end experiences. For example, poor quality, lack of perceived value, or dissatisfaction with an assortment of items. They also cancel when they can’t customize order volumes to match their requirements. This is a reason consumers prefer to go out and buy the products when they need them. Or when they are not provided with options to add/edit/change their subscription, and they get bored.
1/3 Cancel In Less Than 3 Months & Over 1/2 Cancel Within 6 Months
Catering to your customer increases loyalty, keeping people signed up for a more extended period. You have to ask customers what they want, listen to their answers, and act on it. Successful custom box subscriptions adapt and personalize options to each individual consumer based on data collected.
Knowing the attitude and behavior of your shoppers gives you the ability to optimize your budget allocation and target audiences more effectively. PayWhirl offers various data and metric reports to help you learn about and understand your customer demographics. They also have widgets that can be chained together, allowing your customers to build custom box subscriptions. They can then customize the product or service they want or need to be delivered at their desired frequency.
Expanded Consumer Base
The variety of products and ease of signing up for box subscriptions is resonating with consumers everywhere, not only in the U.S. Custom box subscriptions offer enterprises an opportunity to interact with audiences they may not have been familiar with before. While it’s important to know your customers, there are additional opportunities to open up your brand to consumers outside the U.S.
The Subscription Box market in the UK is taking off. It might be time to look out of the box for more subscription box customers. Year-to-year online visits have risen 30%+ in 2017 to 76.7 million according to a study by Hitwise.
Because of low upfront costs, companies may see different kinds of consumers take advantage of budget-friendly options offered. Its no secret consumers are always looking for the best deal for their dollar when it comes to goods and services; this includes consumers outside the U.S. subscription box bubble.
Consumer demographics in the UK are slightly different than the U.S. expanding the opportunity for acquiring new customers. While the audience in the UK tends to be younger females with a spread of income who like to experiment, are ethical, and influenced by celebrities; the most significant growth recently was seen from males and older audiences who enjoy change and embrace adventure.
PayWhirl integrates with multiple gateway and shipping solution companies that businesses can use throughout the world. There is no limit on the distance you can go to provide goods and services to customers. If you decide to go international PayWhirl is there to support you.
Maturing
It’s no secret we have seen explosive growth with custom box subscriptions in the U.S. According to a study done by Hitwise, online visits have risen from 4.7 million in 2014 to 41.7 million in April of 2018. This growth rate has slowed down, showing only a 3% increase YoY. The top subscription sites dominance is dropping, allowing more competition to enter.
Today’s subscription box providers are focusing on more specialized niche offerings. 65% of subscription companies select items for customers based on knowledge of their tastes. 14% provide things the customer will need on a defined schedule like razors or pet food. Smaller, niche category markets are on the rise and the ones seeing an increase in visitors so far this year.
Evolving
The custom subscription box industry is maturing, but by no means is going away. There is room for new players and innovative brands to enter niche markets like Kids Boxes and Apparel Boxes, and there is an excellent reason to keep an eye on Lifestyle and Pet categories since interest is growing. “Some of the larger chains are looking at the penetration into the market. You are going to see new entrants into the space,” says Paul Chambers, co-founder of Subscription Trade Association.
The UK sees attention toward niche markets linked to evolving consumer interests. This is based on new keywords used when searching for subscription boxes in Q4 of 2017.
The market outlook is bright for growth and retention as it matures. It will always be evolving and changing as demographics and interests change. Major retail brands like Amazon, Walmart, and Sephora have all introduced some type of subscription box; however, space still remains for smaller businesses and for collaboration between major retailers and smaller box distributors.
PayWhirl lets you update the subscription box items customers get to choose from. Doing this allows consumers to select new and exciting options. This flexibility will enable you to stay up to date with changing consumer interests. They also offer payment widgets you can embed directly into your site or launch from a button for a full white label experience.
Are You Ready
Subscribing to products is exciting and new, so naturally, custom box subscriptions are one of the fastest growing segments of online retail. “Demand will continue to grow as shoppers discover the range of options available via subscription,” said Chambers.
By 2023:
65% Of Sub Companies Believe They’ll See Revenue Growth Of 100%
36% Of Sub Companies Believe They’ll See Revenue Growth Of 501%
There are several things to look at when starting or adding a custom box subscription service to your business strategy. Companies must consider: how to process payments, cost of service or product, order and warehouse management, shipping fulfillment, etc. Tracking these responsibilities can be challenging, especially with the growth of interest worldwide.
PayWhirl can help implement these services effectively and handle the majority of operational tasks required when offering custom box subscriptions. They provide flexible options for almost everything; from what a company can customize and use on their website to flexible service plan options, they have you covered.
When you are ready to dive into this market and offer custom box subscriptions, let PayWhirl handle all your payment processing needs!
